PM Daily Market Commentary - 11/04/2013

davefairtex
By davefairtex on Mon, Nov 4, 2013 - 11:45pm

Gold closed down -1.10 to 1314.20 on light volume, and silver closed down -0.22 to 21.65 also on light volume.  The gold/silver ratio rose +0.55 to 60.72.  Gold attempted to rally during NY trading, but the rally faded into the close.  Silver did worse, fading before NY open, rallying briefly, then fading further into the close.  But with volume this light, we likely cannot draw any conclusions from today's price movement.

The buck broke briefly above 81 in asia, and then faded the rest of the day, closing mildly down -0.17 [-0.21%] to 80.64.  So far, 81 resistance is holding - on the other side of the currency pair, the euro is finding support on its 50 day MA at 135.  If the euro can rally, gold should eventually respond.

The exciting action of the day was in GDX, which closed the day up +3.03% on moderate volume, with GDXJ up +2.29% on moderate volume.  GDX opened up, moved higher, and then showed amazing strength going into the close - as gold faded, GDX actually climbed, closing at the high for the day.  This is quite unusual for GDX, which usually faints dead away whenever gold does poorly.  GDX even closed above Friday's open, which suggests a reversal in the downtrend in the mining shares.

To me, this is an unexpectedly bullish outcome in GDX.  Are miners predicting where gold is going next - or is this just an oversold-miners dead cat bounce?

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1 Comment

charleshughsmith's picture
charleshughsmith
Status: Platinum Member (Offline)
Joined: Aug 15 2010
Posts: 691
interesting

Dave, good question. On pure trader's instinct I bought a few Dec. calls on GDXJ early in the day. Let's see if the gains hold or vanish.

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